The formal lifting of the cap on bonuses which was originally imposed by the EU opens the way for staff to receive up to ten times their salaries in bonus payments. The move is part of a wider post-Brexit push to boost the City of London.
The announcement was made in an internal memo to staff. It came four months after shareholders at Barclays’ AGM approved a move to drop the measures which had restricted bonuses to two times bankers’ salaries.
Other banks are preparing to take similar action
Although Barclays is the first UK bank to make the move, all the major UK lenders including, Lloyds and HSBC are in the process of lifting the cap which was a key reform introduced by the EU following the 2007-08 financial crisis.
The move by Barclays follows similar announcements by Wall Street banks including JP Morgan and Goldman Sachs.
The cap was originally aimed at ending bonus culture which was believed to have contributed to the financial crisis in 2007-08. Many thought that it had encouraged the prioritising of short-term profits over longer-term stability.
The Conservatives lifted the cap on bonuses last year as part of a post-Brexit shake-up of City rules.
In a statement, a spokesman for Barclays said: “The revised bonus cap will not alter the way Barclays sets its incentive pool, which is based on overall group performance.
“It will allow us greater flexibility to differentiate individual bonuses within a small and defined group of colleagues, enabling Barclays to continue to compete effectively to retain and attract the best talent globally.”